Written by Mario Morino
Published: © 1995 by The Morino Institute.
Editor's Note: I like to think of The Business of Good, its origin and its mission, as somewhat original and unique. This article, written by Mario Morino 15 years ago about a foundation he started almost 20 years ago reminds me that it is not. But a good read reminds me A. it can be done well and B. There are pioneers to learn from on this honorable path. Reading will also help many friends who have asked about starting their own foundation. [more]
The Birth of a Foundation written by Mario Morino
Launching a private foundation requires more than just financial resources. To be successful, a foundation must be grounded in a clear vision so that every grant it awards reflects its goals and philosophy.
The foundation of today is moving away from the basic hands-off, check- writing model of old. Like most organizations in today’s tight economy, the foundation must allocate its money wisely. Many donors are taking an active role in the grantmaking process, putting a more personal face on their foundations.
Economic factors are not the only ones driving these changes. A wave of former business executives from the baby boom generation, many from entrepreneurial high-technology companies, are setting up nonprofit foundations to pursue dreams outside the business world. These people have enough wealth to retire from business at a relatively young age and to take on a second career. This trend has benefited the nonprofit world by bringing to foundations the business acumen, management skills, and, most importantly, the contacts of former executives.
What motivates these business leaders to shift gears so dramatically? One factor is the wave of mergers and acquisitions during the past fifteen years, which has resulted in a loss of job security and a new sense of uncertainty among white-collar professionals, including many executives. The approach of a new millennium is also a factor, causing many established men and women to pause and reflect on where they are today and where they want to be tomorrow. Some have turned to a more spiritual life, while others are working to contribute something meaningful to society through means other than business.
A few of the more fortunate men and women from the business world have turned to the nonprofit sector out of a desire to give something back to the society that helped propel their successful careers. One such former executive is Mario Morino, a computer software entrepreneur.
Morino retired from the business world at age 49, after having co- founded and helped to build one of the largest software companies in the world, Legent Corporation (now part of Computer Associates International Inc.). Before the ink was dry on his retirement party thank-you notes, Morino was already planning a new venture, the Morino Foundation. Today the Morino Foundation is a private grantmaking entity that funds individuals and organizations in the spirit of community learning. Its primary beneficiary is the Morino Institute in Reston, Virginia, a nonprofit organization that helps individuals, institutions, and communities come to terms with and find opportunity in what Morino calls the Knowledge Age.
I. BIRTH OF A FOUNDATION
When I retired from the business world in late 1992, it was the first time in over two decades that I could concentrate on my dream of giving something back to society and helping others. It was then that I launched the Morino Foundation.
Previously, the hectic pace of the computer software industry had all but monopolized my attention, especially during the late 1980s and early 1990s, when my associates and I brought our company through a series of complicated acquisitions and mergers that resulted in one of the world’s largest software companies, Legent Corporation. In 1992, the company was in both a solid financial state and a strong market position, and was under the leadership of a strong management team, so I was able to step down and begin a new journey in the nonprofit realm.
My early vision for the Morino Foundation was simple: I wanted to play a supportive but active role in the grant projects we would support. This role — what I call a "passive activist" — would mean assisting grantees not only financially, but also by serving as an advisor to them. It would entail providing appropriate contacts who could help them financially or otherwise, and in some cases, even rolling up my sleeves and working alongside them on the planning, development, and marketing of their projects. The idea was not to take control of the projects but mainly to help the grantseekers succeed by providing the expertise, assistance, and resources to which they might not otherwise have ready access.
Much of this activist philosophy stems from my business roots. I had an active management style, a desire to be involved in day-to-day work operations, and a commitment to build and cultivate relationships with my co-workers. Over the years I was blessed with many close friendships and relationships with people at Legent, its customers, and even its competitors.
This personal approach is crucial to the Morino Foundation’s success. Our role is to be involved and supportive, but not controlling. Take the process of awarding a grant. The key is to look at the potential award from both a business perspective and a personal one. Business sense helps me determine whether a project is technically or financially feasible. My personal involvement enables me to judge whether the potential grantee is committed to his or her mission, has the skills to accomplish his or her goals, and whether the right chemistry exists for successful cooperation between us.
This kind of insight is crucial because the Morino Foundation attempts to award grants that will make a concrete, long-term difference in people’s lives, such as keeping disadvantaged youths off the streets by engaging them in computers or athletics, or by uniting parents of mentally impaired children in support groups.
Although the Morino Foundation is not modeled on any particular nonprofit, it embodies many of the characteristics of other organizations from which we have learned. One such organization had a profound influence on our foundation’s vision: the Echoing Green Foundation in New York, which offers fellowships for public service programs. What was most impressive about Echoing Green’s approach was its practice of selecting fellows who have what they perceive to be a calling in their social or religious endeavors. I have tried to follow this practice in the grants made by the Morino Foundation. Investing in people who have a conviction in their beliefs and the drive to succeed is a fundamental necessity of productive grantmaking.
Personal Background
The theme that resonates throughout the projects funded by the Morino Foundation is learning. This is no coincidence. Learning has long been a passion of mine and is the goal of much of the Foundation’s work.
When I started college in the 1960s, I had every intention of becoming a math teacher and coaching baseball. While I was growing up in a poor section of Cleveland, several teachers and coaches had played influential roles in my young life, and I wanted to follow their example. But in college I soon became disillusioned with some of the administrative aspects of teaching and the attitude of too many fellow education students who viewed teaching as "just a job."
So midway through college, I changed career paths and instead became a computer programmer and analyst, and I transferred from Ohio University to Kent State University. During the years 1964 through 1967, I worked with what was then the Euclid Division of General Motors Corporation in Ohio and with the Eaton Corporation’s telecommunications group. All the while I was attending college — Kent State for a year, Cuyahoga Community College for a semester, and finally Case Western Reserve University, from which I graduated.
Both General Motors and Eaton reimbursed my tuition during those years, providing me the luxury of learning about computers — then a hot new field — in a professional setting while carrying a full academic load in business, mathematics, and industrial sociology.
In late 1967, I was fortunate enough to be able to enlist in a special program with the U.S. Navy in which they were recruiting individuals with backgrounds in data processing. Even more fortunately, I was detailed to Navy headquarters in Arlington, Virginia, adjacent to the Pentagon for my time in the service. While in the Navy I organized a group of others that were working at Navy headquarters into a small computer services firm, that eventually became known as the "Morino Marauders." This small business was folded into one of the country’s first time-sharing computer network businesses, U.S. Time-Sharing. This led to yet another new business, where eventually I met my partner and mentor, Bill Witzel. In 1973, Bill and I formed a software company, Morino Associates, in which we were the two principals.
Knowledge as a Tool
I learned early in life that education and knowledge offer opportunity in the face of adversity. This was instilled in me by my parents, neither of whom was able to complete high school, but who inspired all of their children to devour their studies and follow their dreams. We Morinos were all hard-working and driven. We never let a lack of money stand in our way, nor did we use it as an excuse to give up or blame others. As a child, I had watched my family provide food and lodging for those in need even while we struggled to make ends meet ourselves. I never forgot that.
The community spirit and the hunger for knowledge that I grew up with live on in the Morino Foundation today. Most of the Foundation’s grant money goes to innovative programs to help those who are in need learn about such areas as community development, education, and health.
The objective of our foundation is to help people use learning and knowledge to open doors once closed to them, or doors they never even knew existed. This can mean helping a retarded citizen find a job, or offering a single mother a scholarship to attend college.
The avenues for education have never been as exciting as they are today in the evolving Knowledge Age. New and innovative ways of learning and communicating are constantly emerging, including the ability to communicate with many people from afar using computer networks. One aspect of our work is to help people learn about these new modes of communication, knowledge, and information access. That in turn can help them seize the opportunities that knowledge gives them, just as I was able to do.
Setting Up the Foundation
The Morino Foundation began to take shape in early 1990 when I first started to explore options for estate planning. I had accumulated some wealth during my tenure in the computer industry and wanted to ensure not only that my family was well provided for and my finances allocated wisely, but also that we could contribute something meaningful to society outside of my work in the business world.
In developing the estate plan, I was advised to liquidate some of my stock holdings in order to release money for my immediate and extended families as well as for my nonprofit interests. Our attorney proposed a comprehensive estate plan that included setting up a nonprofit foundation. We spent the next two years exploring the concept of the private foundation and hammering out details of a plan.
Ideally, I wanted the Foundation to serve as both a vehicle for the family’s estate upon my death and as a way for me to give something back to society during my lifetime. I had no blueprint for the Foundation back then, I only knew that it should somehow promote community learning. Community learning is the advancement of knowledge or understanding through efforts within a community. It includes everything from mentoring programs to local health clinics to adult education centers. In Boston, for example, the nonprofit group Join Together has done a remarkable job in helping communities better understand and deal with substance abuse.
In the past, community learning came out of the family, the church, and local groups. The Foundation’s goal is to rekindle these types of shared learning in the hope that we can help people improve their lives and communities.
Shortly after leaving Legent in 1992, I donated to the newly established Morino Foundation 100,000 shares of the company’s stock at a value of approximately $4.8 million. To ensure that the Foundation would remain viable and productive after my death, we structured the family estate plan to provide additional funding. The plan guarantees both that my family will be provided for and that the Foundation will be receive additional support. We intend, as well, to supply further contributions to the Foundation during my life-time as our net worth grows, mostly from venture investment activities in the information and communications technology fields.
The Morino Foundation also was set up in such a way that my goals and visions for the nonprofit will live on even when I am no longer actively involved. This was accomplished by naming the four trustees of my estate to the Foundation’s board of directors: my wife, Dana, and three of my closest friends, including our legal counsel and two former business associates. In this way, the future of both the Foundation and the family is secure, and the Foundation will be positioned to award grants in the spirit in which it was created.
The logistics of setting up the Foundation were fairly straightforward — we had to submit the usual applications and legal documents. We first filed with the state of Virginia to incorporate the Foundation and then applied with the Internal Revenue Service for tax- exempt, private foundation status. This whole process took about six months, including approval from the IRS.
In anticipation of our needing more funds for the Foundation’s nonprofit activities, we recently moved an additional 110,000 shares valued at around $4.7 million to a charitable investment fund. This will augment the Foundation’s future grants to public charities.
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